FAO Food Price Index starts 2016 dropping to nearly 7-year low

Rome – The FAO Food Price Index fell in January, slipping 1.9 percent below its level in the last month of 2015, as prices of all the commodities it tracks fell, sugar in particular.

The Food Price Index averaged 150.4 points in January, down 16 percent from a year earlier and registering its lowest level since April 2009.

The FAO Food Price Index is a trade-weighted index tracking international market prices for five key commodity groups: major cereals, vegetable oils, dairy, meat and sugar.

The main factors underlying the lingering decline in basic food commodity prices are the generally ample agricultural supply conditions, a slowing global economy, and the strengthening of the US dollar.

This month, FAO also raised its forecast for worldwide cereal stocks in 2016, as a result of lowering its projected consumption and raising 2015 production prospects.

The FAO Sugar Price Index fell 4.1 percent from December, its first drop in four months, as crop conditions improved in Brazil, by far the world’s leading sugar producer and exporter.

The Dairy Price Index dropped by 3.0 percent on the back of large supplies, in both the EU and New Zealand, and torpid world import demand.

The FAO Cereal Price Index declined 1.7 percent (to 149.1 points) amid ample global supplies and increased competition for export markets, especially for wheat and maize, as well as a strong US dollar.

The Vegetable Oil Price Index dropped 1.7 percent, mainly because of a decline in soy oil prices reflecting expectations of ample global soybean supplies.

The Meat Price Index moved 1.1 percent lower than its revised December value, with prices of all meat categories falling, except pigmeat, which was sustained by the opening of private storage aid in the EU.

Prep. By: Sh. Kh.